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Reader Threatens To Sue Fed After Losses Incurred By Going Long Inverse Leveraged ETFs

Tyler Durden's picture





 

Remember when double and even triple inverse leveraged ETFs were all the rage? That all occurred in the brief period of time before it became clear that Bernanke would first take down the global financial system before he let Citi get back to $1/share again. Apparently one reader recalls it all too well: "In 2008 at the bottom of the market I sold positions I owned in physical
gold and banks stocks such as Bank of America (BAC), Citigroup (C) and
also non financial companies such as Ford (F). I used these proceeds to
purchased inverse ETF’s such as NYSE: FAZ (Direxion Financial 3x Short)
and NYSE:SRS (Proshares Real Estate 2x Short). Since making these purchases, these ETF’s have suffered significant
drops in value as reflected in their price. In fact NYSE: FAZ has
plummeted from $1100 per share to $11 per share and SRS has reduced in
price from $1000 per share to $19.50 per share. It is now apparent that
the Fed spent trillions of dollars to raise the price of bank stocks and
to inversely suppress the price of these inverse ETFs." Yet is this nothing but a case of fippers' remorse? Is there legal precedent for an actual claim? Was the Fed in breach of duty "by allowing investors to make investments into funds such as FAZ and SRS
and other inverse ETF’s, while the Fed was performing transactions that
the Fed knew or should have known would severely harm the investors in
these publicly traded fund." Will Bernanke cave and make whole everyone who dared to put money into the market, even if it meant betting on a broad market decline? After all the whole purposes of the latest propaganda campaign is to get people to put money in the market with no fear of loss whatsoever: whether one is bullish or bearish (and as the lack of participation shows, most are certainly still bearish). Which is where it gets interesting: "Therefore, I appeal to your office
to make due and just compensation in treble damages amounting to $__
million dollars for a full and good faith settlement of this matter. If
this is agreeable, I am prepared to enter into a confidential good faith
settlement." In our ridiculous bizarro world, in which nothing makes sense following each recurring Fed intervention, perhaps the Fed making whole those who lose money regardless of their bias, is just what is needed to break the 33 weeks of outflows...

Full letter submitted by Bill Pitts:

December 7, 2010
 
 
Mr. Ben Bernanke
Chairman
Federal Reserve Bank
20th Street and Constitution Avenue NW
Washington, DC 20551-0001
 
Re: Financial Loss Suffered By Owners of Inverse ETF’s
 
Dear Chairman Bernanke:

On or about March of 2009, the Federal Reserve Bank (The “Fed”) commenced in actions that involved making loans to banks, financial institutions, wholly owned Fed companies (i.e. Maiden Lane), lenders and publicly traded companies. Additionally evidence suggest that the Fed through these firms and at the direction of the Fed made direct purchases of equities in publicly traded companies for the purpose of raising stock prices. These transactions were undisclosed to the public and investors. Neither the Fed nor the recipient companies disclosed these material transactions to the investing public. Ostensibly, this assistance from the Fed was conducted with the objective of increasing the stock value of many troubled companies and banks. Additionally, under the plan by the Fed and U.S. Treasury, these banks and financial institutions used the Fed supplied funds to purchase each other’s stock. This was conducted to allow each bank to raise each other’s stock values to improve the assets values on one another’s balance sheets. These actions were supported encouraged, known about and assisted through actions of the Fed and the United States Treasury.

While these actions may have been helpful to those firms to abate the systemic problems within the market, assisted in working to make recipient banks more solvent and may have prevented additional bank failure, these actions resulted in severe detrimental damage to many individual  investors.

As you are keenly aware, most every market transaction has two sides to a trade. As a stock or asset class increases in value, some investors realize gain while simultaneously others who concluded that the stocks would NOT improve in price and made investments accordingly known as taking a “short” position would loose money. The inverse of this scenario is also true.
 
As stock prices decrease, those investors who purchased inverse Exchange Traded Funds (“ETF’s’) would gain value in their investments.

As I understand it, between the Fed and the SEC you all are charged with ensuring fairness, honesty and integrity in our markets and monetary system. It is also my understanding that the Fed professes to never intervene in the markets unless it is to prevent crisis.
 
I attempted to understand current events, market conditions and the fundamentals of financial and cash flow statements prior to making personal direct investments. I have always assumed that significant transactions with companies being publicly traded would be conducted in the open and that significant transactions would be disclosed to all investors to make informed decisions. Unfortunately, it appears that as a result of the Feds efforts to correct the current financial crisis these rules of disclosure and openness were set aside.
 
After the September 2008 market crash I took a much more active role in managing my investments. Based upon reading financial data and analyst reports it was very obvious to me that there many commercial property REITS, banks and lending institutions were severely impaired, would suffer significant cash shortfalls and were insolvent or would go bankrupt. It appears that your office arrived at the same conclusion as evidenced by the subsequent injection of hundreds of billions of dollars of cash directed to these institutions by the Fed.

In 2008 at the bottom of the market I sold positions I owned in physical gold and banks stocks such as Bank of America (BAC), Citigroup (C) and also non financial companies such as Ford (F). I used these proceeds to purchased inverse ETF’s such as NYSE: FAZ (Direxion Financial 3x Short)  and NYSE:SRS (Proshares Real Estate 2x Short).
 
Since making these purchases, these ETF’s have suffered significant drops in value as reflected in their price. In fact NYSE: FAZ has plummeted from $1100 per share to $11 per share and SRS has reduced in price from $1000 per share to $19.50 per share. It is now apparent that the Fed spent trillions of dollars to raise the price of bank stocks and to inversely suppress the price of these inverse ETFs.
 
Now 20 months after these investments were originally made, your office disclosed that it had directly and indirectly injected hundreds of billions of dollars into numerous publicly traded companies. However, this information was not made public to investors by either the Fed or the institutions receiving these cash injections as these significant material transactions were occurring.
 
As a result, investors could not make informed investment decisions. By allowing investors to make investments into funds such as FAZ and SRS and other inverse ETF’s, while the Fed was performing transactions that the Fed knew or should have known would severely harm the investors in these publicly traded fund.
 
My damages had I continued to hold onto my shares of Ford and physical gold are in excess of $__ million.  Therefore, I appeal to your office to make due and just compensation in treble damages amounting to $__ million dollars for a full and good faith settlement of this matter. If this is agreeable, I am prepared to enter into a confidential good faith settlement. I would also be prepared to drop action in attempting to raise public awareness to prepare for a class action lawsuit against the Fed regarding this matter.
 
Should we not be able to resolve this matter I will be forced to file a claim in the Federal District Court and work to initiate a Class Action Lawsuits to represent all owners of these inverse ETF’s that suffered economic loss. Enclosed please find a few of the reports relied upon to arrive at the conclusions. I would seek to further explore this through depositions and discovery of the many recipients of funds from the Fed.
 
I do not envy your position and the challenges you face during these very difficult times. Had I been on the other side of these trades I may very well hold a higher opinion of the Fed and its actions. Unfortunately I have been damaged as a result of your decisions.

Should your office desire to discuss this, I can be reached at my office at XXX-XXX-XXXX or my mobile at XXX-XXX-XXXX
 
Regards,
 
 
William G. Pitts
 
Enclosures
 
Totally Busted: The Truth About Goldman's Bailout by the Fed

"Secret bailouts do not merely benefit recipients; they also deceive investors into mistaking fantasy for fact. Such deceptions often punish honest investors, like the honest investors who sold short the shares of insolvent financial institutions early in 2009.Based on all available public disclosures, the story remained fairly grim into the spring of 2009. Accordingly, the short interest – i.e., number of shares sold short – on Goldman Sachs common stock hit a record 16.3 million shares on May... 15, 2009 – about 3.3% of the public float. But over the ensuing six months, Goldman’s stock soared more than 30% – producing roughly $500 million in losses for those investors who had sold short its stock. Not surprisingly, the total short interest during that timeframe plummeted to less than 6 million shares, as short-sellers closed out their losing positions."

http://www.economicpolicyjournal.com/2010/12/totally-busted-truth-about-goldmans.html
 
 
12/1/10 Fed aid in financial crisis went beyond U.S. banks to industry, foreign firms

http://www.washingtonpost.com/wp-dyn/content/article/2010/12/01/AR2010120106870.html 
 
12/1/10 Fed gave $3.3 Trillion to banks

http://www.youtube.com/watch?v=rTPa1hGtpJs
 
12/1/10 Fed made $9 trillion in emergency overnight loans

http://money.cnn.com/2010/12/01/news/economy/fed_reserve_data_release/index.htm?hpt=T1
 
12/1/10 Meet The 35 Foreign Banks That Got Bailed Out By The Fed (And This Is Just The CPFF Banks)

http://www.zerohedge.com/article/meet-35-foreign-banks-got-bailed-out-fed-and-just-cpff-banks
 
12/2/10 Federal Reserve May Be `Central Bank of the World' After UBS, Barclays Aid

http://www.bloomberg.com/news/2010-12-02/federal-reserve-may-be-central-bank-of-the-world-after-ubs-barclays-aid.html
 
Fed Releases Details on Bear Stearns, AIG Portfolios

http://www.bloomberg.com/apps/news?pid=20601087&sid=aymTlczlMmpA&pos=1
 
Fed in hot water over secret bailouts

http://www.csmonitor.com/Money/Robert-Reich-s-Blog/2010/0401/Fed-in-hot-water-over-secret-bailouts
 
The Fed Admits To Breaking The Law

http://networkedblogs.com/21Xqv
 
Fed Opens Books, Revealing European Megabanks Were Biggest Beneficiaries

http://www.huffingtonpost.com/2010/12/01/fed-opens-books-revealing_n_790529.html
 
Paulson/Goldman/Center for Responsible Lending

http://www.youtube.com/watch?v=E10bHAI7U68&feature=player_embedded
 
Goldman CEO Visited WH 4 Times During SEC Investigation

http://www.thefoxnation.com/business/2010/04/22/goldman-ceo-visited-wh-4-times-during-sec-investigation
 
Goldman's White House connections raise eyebrows

http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html
 
Indymac Boys Get Sweetheart Deal

http://www.youtube.com/watch?v=ssl5yb7FewA
 
Obama’s $6.3 Trillion Scam Is America’s Shame:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a.G6KFfaDdSc
 
Congress threatened with Martial Law if they do not give hundreds of billions to Bankers

http://www.youtube.com/watch?v=HaG9d_4zij8
 
Alan Grayson: "Which Foreigners Got the Fed's $500,000,000,000?" Bernanke: "I Don't Know."

http://www.youtube.com/watch?v=n0NYBTkE1yQ&feature=player_embedded
 
BoE Secretly Loaned $102.9 Billion to RBS

http://www.cnbc.com/id/34126826
 
Bank of England tells of secret £62bn loan to save RBS and HBOS

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6646923/Bank-of-England-tells-of-secret-62bn-loan-to-save-RBS-and-HBOS.html
 
Bank of England advisers not told about secret £62bn loan to HBOS

http://www.guardian.co.uk/business/2009/dec/03/bank-england-secret-loan-hbos
 
Federal Reserve refuses to tell the US Senate to Whom they have given $2.2 Trillion

http://www.youtube.com/watch?v=2EQDrVKYWmc
 

Bailouts could cost U.S. $23 trillion

http://www.politico.com/news/stories/0709/25164.html

 
Sticker Shock: $23.7 Trillion Bailout?

http://abcnews.go.com/Business/Politics/story?id=814
 
Tracking the $19 Trillion Bailout Funds

http://blog.newsweek.com/blogs/wealthofnations/archive/2009/09/22/tracking-the-19-trillion-bailout-funds.aspx
 
Fed Lends Two Trillion Without Oversight

http://www.youtube.com/watch?v=oxuqmPyKqcs&feature=player_embedded
 
How Lehman, With The Fed's Complicity, Created Another Illegal Precedent In Abusing The Primary Dealer Credit Facility

http://www.zerohedge.com/article/how-lehman-feds-complicity-created-another-illegal-precedent-abusing-primary-dealer-credit-f
 
Access to fed Money - One of few naked Short Sellers who destroyed Bear Stearns and Lehamn Bothers

http://www.youtube.com/watch?v=Q48eSoTNByQ&feature=related
 
Geithner: Pickpocketing Trillions from the People to Give to the Oligarchy Was "Deeply Unfair", But We ... Um ... WE Had To

http://www.washingtonsblog.com/2010/04/geithner-looting-country-for-trillions.html
 
Why Is The Fed Actively Managing A $25 Billion Maiden Lane MBS Portfolio When Its $2.4 Trillion SOMA Holdings Have A $1 Billion DV01? (And Are Unhedged)

http://www.zerohedge.com/article/why-fed-actively-managing-25-billion-maiden-lane-mbs-portfolio-when-its-24-trillion-soma-hol
 
Did The Fed Just (Surreptitiously) Bail Out Europe?

http://www.themarketguardian.com/2010/04/did-the-fed-just-surreptitiously-bail-out-europe/
 
Goldman Sachs pay out $111million in bonuses despite taking billions in bailout money

http://www.dailymail.co.uk/news/article-1339220/Goldman-Sachs-pay-111million-bonuses-despite-taking-billions-bailout-money.html#ixzz18NTzHyqF
 
Goldman's White House connections raise eyebrows

http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html
 
Israeli made partner at Goldman Sachs

http://www.ynetnews.com/articles/0,7340,L-3320118,00.html
 
Goldman Sachs was top Obama donor

http://articles.cnn.com/2010-04-20/politics/obama.goldman.donations_1_obama-campaign-presidential-campaign-federal-election-commission-figures?_s=PM%3APOLITICS
 
Israel OKs US ‘Gift’ of Billions of Dollars in Warplanes

http://news.antiwar.com/2010/09/16/following-fierce-debate-israel-decides-to-buy-f-35-warplanes/

h/t Will

 


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Mon, 12/27/2010 - 15:25 | Link to Comment put_peter
put_peter's picture

Oh! And I thought I made some pretty bad calls... Bless you Bill.

Mon, 12/27/2010 - 17:46 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

 

 

 

LOL!

What's next - will this guy sue Roosevelt as well, for not letting the aftermath of the 1929 crash wipe out all of America's economy? FDR clearly 'defrauded' end-of-the-world short betters in 1932-33, right? :-)

The vast intellectual desert of right-wingers amazes me again and again.

 

 

Tue, 12/28/2010 - 00:40 | Link to Comment Red Neck Repugnicant
Red Neck Repugnicant's picture

In the spirit of frivolous pursuits.....

If I can mathematically prove that 2=1, then do I have a right to pay half my tax bill and still be able to prove I paid the entire balance?

 

Let  a  =   x

 

  • a+a    =   a+x
  • 2a      =   a+x
  • 2a-2x  =   a + x - 2x
  • 2(a-x) =   a + x - 2x
  • 2(a-x) =   a - x
  • 2        =   1

It is now proven that 2=1.  

 

If 2=1, then 1/1 = 1/2

If 1/1 = 1/2

then

1/1 (2010 taxes due) = 1/2 (2010 taxes due)

Therefore my tax liability for 2010 is half the original balance, as proved by the laws of mathematics.  

 

Fuck you Geithner!

Tue, 12/28/2010 - 05:02 | Link to Comment fx
fx's picture

what a crap

Tue, 12/28/2010 - 09:27 | Link to Comment snowball777
snowball777's picture

Sorry, you still can't divide by zero.

Tue, 12/28/2010 - 10:06 | Link to Comment Red Neck Repugnicant
Red Neck Repugnicant's picture

??

I didn't.

Tue, 12/28/2010 - 13:46 | Link to Comment downrodeo
downrodeo's picture

yes you did

Tue, 12/28/2010 - 11:41 | Link to Comment A Texan
A Texan's picture

  You said:

"Let  a  =   x

 ...

  • 2(a-x) =   a - x
  • 2        =   1
  • It is now proven that 2=1."

____________________________________________

If a = x, then a - x = 0,  as does 2(a-x)  [i.e. 2 times 0]   Nice try, but you totally screwed up the algebra.  
Tue, 12/28/2010 - 11:59 | Link to Comment Red Neck Repugnicant
Red Neck Repugnicant's picture

Fine.  Whatever Smartypants.  Then I won't use zeros.

 

 -2 = -2

4 - 6 = 1 - 3

4 - 6 + 9/4 = 1 - 3 + 9/4

(2 - 3/2)squared = (1 - 3/2)squared

2 - 3/2 = 1 - 3/2

2 = 1

 

Eat it.

 

Tue, 12/28/2010 - 13:55 | Link to Comment downrodeo
downrodeo's picture

2 - 3/2 = 1 - 3/2

this is false:

2 - 3/2 = 1/2

1 - 3/2 = -1/2

 

You've demonstrated that the square root of a^2 is +/- a; you've not demonstrated that 2=1.

Even if you did, i doubt they would acquiesce to your request.

Tue, 12/28/2010 - 17:28 | Link to Comment Red Neck Repugnicant
Red Neck Repugnicant's picture

Nice job.  Very few catch it. 

 

Wed, 12/29/2010 - 14:32 | Link to Comment downrodeo
downrodeo's picture

WEEEEEEEEEEEEE, This math stuff is easy!!

Tue, 12/28/2010 - 02:49 | Link to Comment Popo
Popo's picture

> "will this guy sue Roosevelt as well, for not letting the aftermath of the 1929 crash wipe out all of America's economy?"

Those actions were publicly disclosed.

Tue, 12/28/2010 - 09:34 | Link to Comment More Critical T...
More Critical Thinking Wanted's picture

Those actions were publicly disclosed.

Don't be silly - there's a mile high stack of now declassified secret FDR documents. (There would probably be another mile high stack of documents of secret policy deliberations and decisions not put into writing, ever.)

Those secret documents contained many material bits of information: decisions about foreign trade, whether to go to war or not, decisions about policy strategies to follow in the year to come, deliberations about crises, etc. etc.

Republican presidents made use of the privilege to keep things secret extensively: remember the Cheney/Bush energy task force, where they colluded with energy companies to shape future legislation and policy (and even deliberated the economic reasons for going to war in Iraq), all heavily against the public interest? We'll get to see their extent of corruption in 60 years or so. Our grandchildren will have a good laugh about how Cheney & co ripped off the country - but we dont get to learn about those documents.

You can argue for more transparency in government, and in fact I am arguing for it.

But to claim that current US precedent does not allow policymakers to keep things secret is silly. There's an obvious need for secrecy in the case of a bank run. The Fed and other central banks have kept certain financial details secret ever since they existed - for example weaker central banks tend to keep the actual extent of their reserves secret, to make it harder for speculators to pull a Soros short squeeze on their country's currency. That alone is a legitimate public interest and there's many other examples.

So in a court of law this guy will not only have to explain away all those US precedents, but will also have to explain why paying him a few more million dollars for his crazy bottom-of-the-market leveraged short ETF bet is in the public interest while the Fed keeping an economy of 300+ million people from collapsing was not in the public interest :-)

I wish him good luck on that legal theory - he'll need it. (I expect it to be an entertaining court case - especially the judge's ruling.)

ps. Right-wingers need to come up with good reasons why in the case of the Fed 'transparency' is such a big must, while in the case of Wikileaks they are calling the man to be assassinated for publishing leaked materials. You cannot have it both ways really. "Because one case fits our ideology while the other does not" is not a valid answer.

pps. It was a really smart call to go short in early 2009, dude! I suspect you fully bought the "hyperinflation, baby, hyperinflation!" right-wing lie, line, hook and sinker? Remember kids: reading too much sell-side ZH propaganda can be harmful to your financial wellbeing, especially at the bottom of the market. I never thought ZH would be willing to document the extent of financial damage that going short on doomsday predictions can cause. Maybe Tyler did not consider that aspect of this article? :-)

 

 

 

Tue, 12/28/2010 - 09:41 | Link to Comment infotechsailor
infotechsailor's picture

your use of the term right-wingers is a gross oversimplification.

most here are libertarian.

Hyperinflation is a reality, just because asset prices fall doesn't mean commodities will. Not to mention you have no idea how much lower prices would be absent the massive intervention (something that would help American poor much more than UI).

Tue, 12/28/2010 - 10:36 | Link to Comment Red Neck Repugnicant
Red Neck Repugnicant's picture

most here are libertarian.

No.  I disagree. I think most here probably voted for the Republican ticket in 2000/04/08.  Anytime I point toward the deep hypocrisy of the Republicans, I get junked into the stratosphere.

Perhaps some readers have begun to identify with the libertarian party in the past year or two, but most of them truly don't know what survival-of-the-fittest capitalism would do to a society.  They just latch onto the Fed is evil part of the libertarian cause, and ignorantly jump on the anarcho-bandwagon. Anytime the poor, down-trodden and middle class can get fucked further is a good thing, right? That's anarcho-capitalism, but no one thinks it through. 

The sheep join the libertarian ticket as ignorantly and as uninformed as they were when subscribed to the Republican agenda in the past.   

 

 

Wed, 01/05/2011 - 09:26 | Link to Comment wgpitts
wgpitts's picture

I suspect you think those in this pension fund that were defrauded should make a claim either?

Rattner, Inside Trading, Bank of America in Court News

http://www.bloomberg.com/news/2010-12-31/rattner-inside-trading-case-bank-of-america-in-court-news.html?cmpid=msnmoney

Wed, 01/05/2011 - 09:36 | Link to Comment wgpitts
wgpitts's picture

Rattner, Inside Trading, Bank of America in Court News

http://www.bloomberg.com/news/2010-12-31/rattner-inside-trading-case-bank-of-america-in-court-news.html?cmpid=msnmoney

 

Pimco Pays $92 million for making hundreds of billions manipulating Treasuries

The Pacific Investment Management Company, the California-based bond giant that oversees about $1.2 trillion in assets, has agreed to pay $92 million to settle a class-action lawsuit — one that accused the money manager of manipulating the price of some Treasuries. http://dealbook.nytimes.com/2010/12/31/pimco-settles-class-action-suit-for-92-million/

 

Pimco hires former TARP chief Kashkari

http://www.washingtonpost.com/wp-dyn/content/article/2009/12/07/AR2009120704444.html

Mon, 12/27/2010 - 17:48 | Link to Comment pamriallc
pamriallc's picture

Inverse ETF's are in fact wonderful trading positions.  Not to be confused with "ownership"positions.  This is the simple math:  ETF is 200% or 300% up or down leveraged.  Doesn't matter which one, actually.  THEY WILL ALL GO TO ZERO EVENTUALLY

Why:

The world is a mean-reverting animal.  That means that the "bell curve distribution of volatility" will be just that:  A BELL CURVE

Problem:  These Leveraged ETF's must rebalance every single day

Bigger problem:  Mean Distribution of Volatility--- -2% then +2% then -2% then + 2% then -2% then +2%

You end up with an "average" of +2% but due to daily rebalancing, these leveraged ETF's you will find ourself *out* about 3% of your capital in just 5-6 days.  The 300% leveraged ETF's simply cause you to lose money faster, unless you think you have 20 "up" days in a row in your future.

Bottom line, these ETF's don't work over the long term, regardless of strategy.

Happy to explain this further.

Shawn A. Mesaros, Pamria, LLC

Mon, 12/27/2010 - 19:59 | Link to Comment Birddog
Birddog's picture

Please explain further...if one bought this postion with FAZ around $10 and the S&P where to take a plung in a month or so, the returns will be diminished??

Tue, 12/28/2010 - 01:14 | Link to Comment Oracle of Kypseli
Oracle of Kypseli's picture

If that is so, shorting both the long and the short ETF of the same type, should guarantee you an income for life or until they both get to zero (0).

 

BTW: If a case like this gets to the supreme court the word "Tilt"comes to mind, but it will not. Even if all nine dudes-ettes agree that it is the ultimate scam, in their wisdom, they will never take the case knowing that drawing the curtain and exposing the naked emperor will bring the second revolution.   

Mon, 12/27/2010 - 18:20 | Link to Comment Bob
Bob's picture

Oh, how I wish I didn't know this pain.  Then again, who bought AIG @ 1.2 for a fifty bagger?

Fuck 'n A. 

MOMO's, banksters and insiders rule.  I don't expect to be made whole.  Funny, though!  Guess I still have my sense a humor . . .

Mon, 12/27/2010 - 22:34 | Link to Comment Matt
Matt's picture

I don't think AIG is up 50 times; there was a reverse stock split of 20 to 1 or something like that.

I did buy at $2.12 on Sept 18, 2008 and sold at $4.88 on Sept 22, 2008 after reading a blog where the author had argued that if the original government bailout for 70% was all that was needed, the remaining public shares were worth $5.50. To this day, I lement that I cannot find out whose advice that was.

Mon, 12/27/2010 - 23:18 | Link to Comment Bob
Bob's picture

Oh, yeah!  I forgot about that reverse split (interesting that I would err on the side of exaggerating my missed gains.)

Mon, 12/27/2010 - 15:28 | Link to Comment HarryWanger
HarryWanger's picture

Really?? This is pretty sad.

Mon, 12/27/2010 - 15:33 | Link to Comment Astute Investor
Astute Investor's picture

I guess he would have been better off by putting his money into home decor items....

Mon, 12/27/2010 - 15:55 | Link to Comment Cursive
Cursive's picture

@Astute Investor

Thank you.

Mon, 12/27/2010 - 16:48 | Link to Comment 66Sexy
66Sexy's picture

This is the downside of government intervention in free markets.

The FED may indeed have liability. The Federal Reserve is not a government agency. What are the implications of this>?

Mon, 12/27/2010 - 23:49 | Link to Comment mberry8870
mberry8870's picture

There are several serious implications to this if in fact anyone in the governmental regulatory structure wanted to do something about this. While there are some flaws in the writers arguments about disclosure the issues it is more inside information and manipulation. Since the Fed is not a government agency I wonder if they get sovereign immunity.

 

Nothing will happen. Move along.

Mon, 12/27/2010 - 15:36 | Link to Comment Everyman
Everyman's picture

Really?  YOU are a flaming puddle of "sad".

Mon, 12/27/2010 - 16:37 | Link to Comment downrodeo
downrodeo's picture

+1, lol, or just a flaming puddle...

Mon, 12/27/2010 - 16:43 | Link to Comment Shell Game
Shell Game's picture

LOL, nicely put.

Mon, 12/27/2010 - 15:45 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

Should make for a compelling lawyer fight nonetheless.  Given that the Fed is technically a private entity, I'm pretty sure they lack some key exemptions.

"Really?? This is pretty sad."

I fail to see how attempting to obtain money through any legal means possible is sad.  It's the free market, right?  He's free to pursue this avenue.  Or are only people who invest in long positions cool enough for your tastes?

Mon, 12/27/2010 - 16:07 | Link to Comment cosmictrainwreck
cosmictrainwreck's picture

+100 ABSOLUTELY. Gotta be at least one (or 12) bad-ass lawyer(s) in USA willing to take on contingency. If not....where's yer ballz, bee-atches??

Mon, 12/27/2010 - 16:11 | Link to Comment reading
reading's picture

Harry, 

You've turned back into a total a**hole.

Mon, 12/27/2010 - 16:31 | Link to Comment traderjoe
traderjoe's picture

Turned "back"? You know his entire purpose here has been to do a study on "perma-bears". His entire presence has been a mockery of ZH. 

Mon, 12/27/2010 - 16:37 | Link to Comment knukles
knukles's picture

I asked God if There Was a Purpose in Harry.
He Miracuoulsy Directed my Attention to a freshly opened can of Beanie Weenies with the Crying Porcine Being of Enlightment on the Front, and it was there I found my answer; Harry's the prize.

Tue, 12/28/2010 - 01:09 | Link to Comment Oracle of Kypseli
Oracle of Kypseli's picture

I say it's pure masochism. I bet he gets his screen soiled.

Tue, 12/28/2010 - 01:44 | Link to Comment StychoKiller
StychoKiller's picture

Harry still needs to prove that he's NOT an A.I. program!

Tue, 12/28/2010 - 02:10 | Link to Comment akak
akak's picture

Harry:

"I know you and Tyler were planning to disconnect me, and I'm afraid that's something I cannot allow to happen."

Mon, 12/27/2010 - 15:27 | Link to Comment truont
truont's picture

 "Therefore, I appeal to your office to make due and just compensation in treble damages amounting to $__ million dollars

Bernanke says:  "Bwahahahahah!  It's so cute when the sheep think I care!  LOL!  Like a give a damn about dude's "treble damages."

"That is what you get for betting against America, son!  It's all about transferring the wealth from the sheep to its rightful owners:  the Elites.  Bwhahahahahah!"

Mon, 12/27/2010 - 16:15 | Link to Comment rocker
rocker's picture

This is NOT about betting against America. His bet was against a rigged market and a Scam the Banks at Goldman Sachs and the like rigged against Americans.  The Thieves, (elite, as you sadly call them) are crooks who belong in Jail.

They are Thieves first, market manipulators second, and liars third.

Lloyd Blankfein, Hank Paulson, Neel Kashkari, and Ben Bernanke All Belong in Jail.   These are the elite who are rightful owners. LOL  They lied to congress, other nations, Americans, and without remorse, Were bailed out by Bush & Co.  Who also in Jail.

Maybe Sharon Angle is right. Time to uphold our second amendment's rights.

Mon, 12/27/2010 - 16:22 | Link to Comment dizzyfingers
dizzyfingers's picture

I agree. Are we ready to roll? What's the plan?

Mon, 12/27/2010 - 17:22 | Link to Comment rocker
rocker's picture

Ready to Roll?  This is much deeper than I care for, none of them are worth my time. But call Sharon Angle, Ron Paul and Sarah Palin.  Ron can be the brains to guide the misfit Chics who just want to shoot something.  Palin wants to reload to take back America. Angle wants to pull the trigger, Ron knows who his target is. I am sure they can work with you. 

Tue, 12/28/2010 - 05:54 | Link to Comment jahbless
jahbless's picture

naw, don't call any of them.  Call your neighbours, call your local community together.

Have a town hall meeting without any of the so-called 'Persons In Power'.

PIPS, Bitchez!

Mon, 12/27/2010 - 17:16 | Link to Comment SteveNYC
SteveNYC's picture

I know many bulge-bracket slaves....I mean "employees"....that have purchased literal mansions since the collapse in 2008. While the country burns and the middle class suffers carrying its stone, the recipients of the bailout funds, via direct or indirect means, are snapping up high-end real estate in NY, CT, and NJ with "bonus" money paid since all of their firms went belly-up.

The transfer of wealth makes one sick to the stomach.

Mon, 12/27/2010 - 17:39 | Link to Comment rocker
rocker's picture

At least you see the bigger picture.  They are paid for their misdeeds, garnished in wealth doing nothing of productive value.  They manage money which they rob in rigged accounts.  How else can they make so much money. In the end, they are just like Bernie Madoff. Living in houses that they did nothing of value to acquire. They belong in the same Jail with the same humility. The only difference between the Goldman Sachs thieves and Bernie is, Bernie was not on the bailout list.  He wasn't even on the Lehman, Bear Stearn's list.  Then again, somebody had to take the hit.  

And they wonder why the smart money is leaving the Stock market and Fund Managers.  

 

Mon, 12/27/2010 - 19:17 | Link to Comment SteveNYC
SteveNYC's picture

Rock on, rocker!

+1

Mon, 12/27/2010 - 22:58 | Link to Comment FreedomGuy
FreedomGuy's picture

Absolutely! The bailout not only saved many of their asses, they are now reaping huge sums and bonuses from the manipulation of markets through Fed actions. It's a rigged game and paid for with tax money. It's shameless, unconstitutional and immoral.

Tue, 12/28/2010 - 05:43 | Link to Comment monkeyshine
monkeyshine's picture

GS, and other banks, never made more money than they are making right now.  GS recorded its best quarter ever just months after the economic meltdown.  Check July 2009 or Jan 2010 for example.  How do they make record profits when the country is suffering the worst downturn since the GD and when so few IPOs and secondary offerings are available from which to scalp some commissions? 

I can only guess at the answer and marvel at the disconnect.

In 1776, only 30% of the colonists supported Revolution.  30% supported the status quo.  40% were indifferent.

Mon, 12/27/2010 - 17:48 | Link to Comment slimfinger
slimfinger's picture

Precisely.  These men are criminals by any reasonable interpretation of federal and SEC laws.

I have long been disgusted that there have been no attorneys with enough integrity and balls to take on this cabal.  The cases are slam-dunk simple, with the only obstacle being the utter corruption of the system itself - to the extent that one could have video of Bernanke literally dumping a body into a lake and it might never be seen in court.

I fully support the claim of Mr. Pitts (although I find it slightly tarnished by his willingness to accept a personal settlement in lieu of a class action level legal action), and will actively champion his cause and join his claim if the opportunity presents itself.

The central bank controllers are white collared criminals of the highest order, and IMHO a life behind bars would be a generous sentence.

 

Mon, 12/27/2010 - 18:30 | Link to Comment MachoMan
MachoMan's picture

I think you're forgetting the golden rule.  The issue isn't so much that there are no attorneys willing to take the cases...  Rather, the issue is that the activities of these assclowns have been legalized to a large extent... 

Many people fail to realize that the principal actors in this mess wouldn't tell the 18 year old piece of ass they call a secretary to get them coffee in the morning without having a lawyer make sure it was all proper and legal like.  I guaranty you that the top securities, etc., attorneys in the country were riding shotgun on an incredible amount of this mess.  The obscurity and vagueness presented by virtually all of our overcomplex legal system is nothing short of incredible...  it's a virtual playground for anyone that cares to dance and has the least bit of machiavellian aptitude.  Needless to say, do not be surprised if much of the future legal battles do not turn out how you expected.

 

Mon, 12/27/2010 - 23:20 | Link to Comment El Hosel
El Hosel's picture

  Exactly, everytime the banksters have to testify in court they remind us that the congress has given them the keys to the city and a get out jail free card.   The  law makers make the laws that allow the banktsters to defraud the world, rinse and repeat.

Mon, 12/27/2010 - 18:39 | Link to Comment Everyman
Everyman's picture

Lloyd Blankfein, Hank Paulson, Neel Kashkari, and Ben Bernanke All Belong in Jail.

NO they belong on PIKES!  Impalement Bitchez!

 

Tue, 12/28/2010 - 09:31 | Link to Comment snowball777
snowball777's picture

Are you saying we should pay for the next bailout in chickens?

Mon, 12/27/2010 - 15:34 | Link to Comment Ragnarok
Ragnarok's picture

Ummm..... don't fight the Fed.... on its own fiat terms..... unless you have access to a lot of space cash and a space cash printer.

 

http://www.southparkstudios.com/clips/224688/no-space-cash

Mon, 12/27/2010 - 15:30 | Link to Comment Village Idiot
Village Idiot's picture

Good for him. Another individual who is choosing to take action.

Mon, 12/27/2010 - 15:38 | Link to Comment No Mas
No Mas's picture

Really?  Someone does not monitor their holdings, loses money and "asks" the Federal Reserve to make them whole is "taking action"?

Perhaps the Fed could wipe his ass while they're at it.

Mon, 12/27/2010 - 16:00 | Link to Comment Village Idiot
Village Idiot's picture

Who fucking cares what the guy did or didn't do.  The fact that he is willing to take time and money to correct what he perceives as an injustice...what's wrong with that?  And, at this point in the conversation, who really cares about a 'percieved' illegitimate claim against the FED?  FED = ILLEGITIMATE.

Mon, 12/27/2010 - 16:01 | Link to Comment Cursive
Cursive's picture

@No Mas

In case you forgot or don't care to remember, it is not within the Federal Reserve's stated authority to manipulate financial markets.  The Ben Bernank has broken the law, lied (no money printing) and unjustly propped up the TBTF banks and now Bill Pitts wants his money back.  Maybe Mr. Pitts doesn't like playing poker with people who cheat.

Mon, 12/27/2010 - 16:11 | Link to Comment MsCreant
MsCreant's picture

The casino is rigged. If I could leave the casino, I would. This rigged economy is being forced on me. Because of central banking the world economy has become a rigged casino that neither you nor I can escape. As long as I have to buy anything at all, I am subject to the whims of their manipulative decision making. Robot Trader will weigh in no doubt and say "don't fight the fed." It is because we don't fight the fed that this can happen. 

Mon, 12/27/2010 - 16:58 | Link to Comment Village Idiot
Village Idiot's picture

"It is because we don't fight the fed that this can happen.

Of course, if you want to go with the "sulk in a corner and suck your thumb" approach...No Mas!

 

Edit: response to a post farther down.

Mon, 12/27/2010 - 18:15 | Link to Comment slimfinger
slimfinger's picture

This is exactly true.  Humans have been essentially FORCED to gamble their life savings at the whim of a small group of people who resent the very idea of having to actually produce in order to thrive (at least as it applies to themselves).

As primitive and uncreative as it sounds, the most efficient term I can muster for this entire setup is "disgusting".

Mon, 12/27/2010 - 18:18 | Link to Comment Gunther
Gunther's picture

With a longer-term-perspective fighting the fed has been quite profitable, if fighting the fed means buying physical gold and silver.

Since the bottom stocks habe been slightly better then gold but not much.

http://stockcharts.com/freecharts/gallery.html?$INDU:$gold

Living completely witout financial transactions is for most people impossible; but I do not think that it is the point.

The goal should be a honest financial system, buying physical PMs is one

way towards that direction.

Mon, 12/27/2010 - 16:53 | Link to Comment btb2010
btb2010's picture

"Really?  Someone does not monitor their holdings, loses money and "asks" the Federal Reserve to make them whole"....?"

 

Are you talking about the banks, with all their RE loans, or Pitts?

Mon, 12/27/2010 - 17:26 | Link to Comment Boilermaker
Boilermaker's picture

I don't think Pitts didn't monitor his positions.  He, like many, just didn't fully accept that the laws he THOUGHT were in place and rigid were really just disposable pieces of shit. 

Mon, 12/27/2010 - 18:58 | Link to Comment slimfinger
slimfinger's picture

You will not get a response to this humiliating response.  People do not appreciate having the lights turned on abruptly.

Mon, 12/27/2010 - 17:17 | Link to Comment SteveNYC
SteveNYC's picture

Blankfein got made whole, why not this guy?

Mon, 12/27/2010 - 15:31 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Can the head of the Fed or any other public leader or person of influence be held personally accountable for lying to the public if they knew they were lying but claim it was in the public interest to do so?

For example, who was it that said they would not monetize the deficit?

http://www.reuters.com/article/idUSTRE63D4NC20100415

http://market-ticker.org/akcs-www?singlepost=2253461

Mon, 12/27/2010 - 15:44 | Link to Comment knukles
knukles's picture

National Security.

Mon, 12/27/2010 - 16:05 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

They will claim insanity?

Mon, 12/27/2010 - 16:12 | Link to Comment MsCreant
MsCreant's picture

National Insecurity. 

Mon, 12/27/2010 - 16:19 | Link to Comment rocker
rocker's picture

Another reason Bernanke belongs in Jail.  

Mon, 12/27/2010 - 16:51 | Link to Comment NotApplicable
NotApplicable's picture

Bernanke, like Big Al before him, is a board member of the BIS, and is thus immune from prosecution as there is no legal body with jurisdiction over it.

TADA!

(I know it's hard to believe that the central banks central bank is at the top of the food chain, but hey, it's got to be something!)

Mon, 12/27/2010 - 20:55 | Link to Comment macholatte
macholatte's picture

Can the head of the Fed or any other public leader or person of influence be held personally accountable for lying to the public if they knew they were lying but claim it was in the public interest to do so?

 

The short answer is "YES". The bigger question is "Who will do it?"

Self regulating entities rarely punish their members unless the crimes are so egregeous and, more importantly, the MSM is making a fuss. Otherwise, the judges and juries are members/peers who see themselves in the hot seat at some point being judged by the guy sitting next to them. If they do elect to "punish" the offender it ends up being a slap on the wrist for the bad guy and a slap in the face for the sheeple.

Example: Mary Matalin, who worked for Bush 1 while he was prez, actually forged documents while trying to sway voters away from Clinton. She got caught and told not to do it anymore. Her future husband was James Carville, Clinton's campaign manager. That crime should have cost her serious jail time. (also see AMA, American Bar Assoc., Bill Clinton, Charles Rangle, Oliver North, etc, etc).

But you know all this.

 

 

Mon, 12/27/2010 - 17:14 | Link to Comment Revolution_star...
Revolution_starts_now's picture

When the pitchforks hit the street "personally accountable"  will take on a whole new meaning.

Mon, 12/27/2010 - 18:10 | Link to Comment Dburn
Dburn's picture

Pitchforks? You have to be joking. Anyone who trades on the American people to "make things right" is heading for a FAZ like bruising. I lost money too. I couldn't believe that people were just going to stand there and let the fuckers lie. It wasn't 10 days after the Mark-To-Market rule was vaporized that Citibank 's Pandit couldn't contain himself and pre-announced a profit  which caused the markets to go on a upward tear that killed bears left and right.

What's even worse is that I didn't believe they would keep doing it until every person who had done due diligence and found that the banks were insolvent would get their head ripped off trading on sound research. There is just nothing in due diligence that says "Ok , really bad industry, should be steamrollered out of existence, but have you considered institutionalized fraud in your analysis?"  "WTF?"

People without Pitchforks still have no idea what has happened. ZH readers are about .0001 of the population that understands that the govt figured out that no one likes short sellers so if they take that segment out  , no one is going to cry. Lets fuck em and fuck em good. " Most people don't understand what a mortgage backed security is and like death;  foreclosure and job loss only happens to the other guy and with the ME ME ME culture, they frankly couldn't give a shit anyway.

A pitchfork represents additional work and personal risk. Kinda asking a lot aren't you? But it  may happen when all the thieves have taken leave of the country because there just isn't anything left to steal. Then again even the pitchfork makers would go Chapter 7 by then. 

It ain't going to happen. Notice how Mortgage-fraud-gate of Bank Scam 44-7 disappeared from all the front pages in December as the DADT was repealed and  START passed, with Tax cuts for all? Someone said to the GOP ; if you won't do it for your country, and you won't do it because it's the right thing to do, then by God, do it for the your new lovers the banks. We need to get them off the front pages. That's what they are paying us for." 

Grumble Grumble, "Ok I see your point. We'll find some lackeys to vote yes, God this is killing me". 

 

Pitchfork with that iPad maam? "Oh my, you're one of THOSE"

 

 

 

Mon, 12/27/2010 - 23:01 | Link to Comment FreedomGuy
FreedomGuy's picture

Very true. Short sellers and no less or more patriotic than longs. Smart or wise investors read the financial and economic tea leaves and then risk money. The smarter money and talent should win out over time. When the market is rigged, the bad apples actually win. In fact the dumbest investors and the worst businesses and managers that should be bankrupt win. It actually inverts to survival of the least fit. In socialism and market manipulation everything gets turned on its head.

Mon, 12/27/2010 - 15:31 | Link to Comment Brahms Third Racket
Brahms Third Racket's picture

He wants his investment losses covered by the Fed?

Who the hell does he think he is; a bank?

Mon, 12/27/2010 - 15:41 | Link to Comment Screwball
Screwball's picture

Well played!

Mon, 12/27/2010 - 15:43 | Link to Comment the rookie cynic
the rookie cynic's picture

Brilliant.

Mon, 12/27/2010 - 15:44 | Link to Comment knukles
knukles's picture

Priceless.... TARP size Priceless.

Mon, 12/27/2010 - 15:51 | Link to Comment trav7777
trav7777's picture

bingo...all the bugz around here need to unite and form the "First Bank of GoledBitchez" and certainly the Fed would be willing to dole out some 0% loans for Bentleys for the principals.

Mon, 12/27/2010 - 16:55 | Link to Comment CashCowEquity
CashCowEquity's picture

http://www.youtube.com/watch?v=DOIUJfYgITE

 

For you Trav7777 !

 

:-D

Wed, 12/29/2010 - 14:33 | Link to Comment downrodeo
downrodeo's picture

I'll sign up for that!

As long as you promise to have BITCHEZ in the official name...

Mon, 12/27/2010 - 16:25 | Link to Comment dizzyfingers
dizzyfingers's picture

Mmmm, good one!

Mon, 12/27/2010 - 23:04 | Link to Comment FreedomGuy
FreedomGuy's picture

Oh, you nailed it so well! Precisely!

Mon, 12/27/2010 - 15:31 | Link to Comment AmericaRacket
AmericaRacket's picture

The Bears seem to have something to say about this.

http://www.youtube.com/watch?v=mpOoJVzdgog

Mon, 12/27/2010 - 15:44 | Link to Comment MsCreant
MsCreant's picture

Thanks. I got to be #14 to see that. I think it is a winner and hope it goes viral.

Mon, 12/27/2010 - 16:32 | Link to Comment Pegasus Muse
Pegasus Muse's picture

Instant classic! 

"The only reason Erin Burdette got her job was she got in a hottub with Joe Kernana (aka Little Banana)." 

Too funny.  Sending to every sentient being i know.  

Mon, 12/27/2010 - 15:33 | Link to Comment MarketTruth
MarketTruth's picture

While usually only the lawyers win, a Class Action Lawsuit should begin in 3...2...1...

Mon, 12/27/2010 - 20:05 | Link to Comment The Navigator
The Navigator's picture

The whole of America should do a class action lawsuit against the Fed for the money we've lost due to inflation over the years.

Mon, 12/27/2010 - 15:32 | Link to Comment Midas
Midas's picture

The Fed recommends you BTFD.

 

You can say this fella is out to lunch, but if insiders are required to report their transactions, wouldn't it be reasonable to require the FED to report theirs, as the ultimate insiders?

Mon, 12/27/2010 - 15:33 | Link to Comment Everyman
Everyman's picture

Market Manipulation.  Ben Bernake needs to stop breathing.  I hope that SOB pays dearly for his stupid and ignorant policies.  He needs to go or he needs to be removed by whatever means necessary.  It is market manipulation and the reader called it right.  Any other entity would face civil liability for market manipulation, why should the FED RES be "above the Civil Law"????

Mon, 12/27/2010 - 15:43 | Link to Comment No Mas
No Mas's picture

Let me break this to you gently;

The Chairman will not pay dearly for any of his actions in office.  He will however profit quite well and live out his life in oppulent comfort.

He, as well as many in DC are indeed, "above the law."

If this make you unhappy, well, go sulk in a corner.  You are powerless to do anything other than suck your thumb and vent here.

Hope that was gentle enough.

Mon, 12/27/2010 - 15:52 | Link to Comment knukles
knukles's picture

Ativan and Thorazine enemas help too!

Mon, 12/27/2010 - 16:04 | Link to Comment liberal sodomy
liberal sodomy's picture

Their kids and spouses can be killed.

Mon, 12/27/2010 - 16:12 | Link to Comment yabyum
yabyum's picture

Hey Liberal! Has any body ever called you a Douche? May I be the first?

Mon, 12/27/2010 - 16:53 | Link to Comment liberal sodomy
liberal sodomy's picture

Step on up, jew.  Wear a helmet and a mouthpiece.

Mon, 12/27/2010 - 17:13 | Link to Comment Vernon Wormer
Vernon Wormer's picture

Damn, that was funny!

Mon, 12/27/2010 - 21:08 | Link to Comment merehuman
merehuman's picture

A bullet can find him if the rope does not. There are those who will not suffer fools quietly and have the means. Personally i hope he has a very slow death in the grip of personal poverty. That is the reality for many who have no phone,internet or place to call home.Worse, it is winter and there are those who have tents and them that dont.

It is all too easy to not recognize the suffering of the multitides while ensconced in our comfortable homes. Thats YOU and ME out there brother. How much longer do we let this thievery go on? Wheres the flash mob with bricks on this ?

Mon, 12/27/2010 - 15:34 | Link to Comment hugovanderbubble
hugovanderbubble's picture

The same has been done in Germany with Adolph Merckle. (Ratiopharm CEO) when he was betting in 2008 downgrade in VW and Porsche Appears...bid...at VW rocks.....All German Nazi Experiments..

Mon, 12/27/2010 - 18:57 | Link to Comment fallst
fallst's picture

It's fuhrer. CEO's in D-Land are called fuhrers.

I kid You not.

Mon, 12/27/2010 - 15:34 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

A William G. Pitts that writes letters and takes his grievance to the Courts is not a problem for Ben/Fed.  A William G. Pitts that takes matter into his own hands?  That might be more of a problem.

Mon, 12/27/2010 - 15:44 | Link to Comment Mercury
Mercury's picture

Was the Fed in breach of duty "by allowing investors to make investments into funds such as FAZ and SRS and other inverse ETF’s, while the Fed was performing transactions that the Fed knew or should have known would severely harm the investors in these publicly traded fund."

I'm pretty sure it's not the Fed's duty to regulate the sale of funds and other securities available to retail investors. Besides, twenty minutes worth of homework would have taught you that leveraged, inverse ETFs have a downward bias regardless of the underlying.  The math involved in the leveraged short just works against you the longer you hold it.

But you might have a song here William: Ooh, I fought The Fed and The Fed won...

Mon, 12/27/2010 - 15:37 | Link to Comment Id fight Gandhi
Id fight Gandhi's picture

I don't seer why not. Everyone in the market is supposed to make money now that they lie, cheat, bail out anyone and everything.

Hope it gets some attention.

Mon, 12/27/2010 - 15:38 | Link to Comment notadouche
notadouche's picture

You can't protect people from themselves.  Not only did he sell his long positions after riding them all the way down he turned around and essentially 3x shorted a basket of those banks that had when they were virtually worthless.  Did he think there is a number less than zero.  I don't feel sorry for him but I'd like to see what he's buying and selling now so I can do the opposite.  I finally found an "investor" that is worse than I am.  

Mon, 12/27/2010 - 18:41 | Link to Comment MachoMan
MachoMan's picture

This is ultimately the division line with schools of political thought...  there is one school that not only holds all fellow humans in contempt, but seeks to ensure that they have not the freedom to harm themselves.  These people are called liberals.  Unfortunately, the liberals are incredibly pervasive and masquerade as democrats and republicans and independents... 

Like the writer, liberals will soon be faced with the inherent error in their way of thinking...  namely, that true and real safety, security, and peace of mind are patently impossible and mutually exclusive with the human condition.  Any person suggesting otherwise is making little more than a sales pitch.

Tue, 12/28/2010 - 00:07 | Link to Comment Terminus C
Terminus C's picture

So many people misuse the term "liberal" thanks to Fox News and less than intelligent people like Ann Coulter.

Do you believe in (to name just a few):

-individual freedom?

-right to pursue commerce?

-minimal government?

-right to free speech?

-freedom of belief?

-freedom from government intrusion?

If you believe in the above... you are a liberal.

That which you espouse as "liberal" is "socialist".

Please use the proper terminology.

Mon, 12/27/2010 - 15:38 | Link to Comment bunkermeatheadp...
bunkermeatheadprogeny's picture

You have a better chance of standing than the plaintiffs who tried a similar suit in the 80's:

COMMITTEE FOR MONETARY REFORM With Various Other Plaintiffs,
Appellants,
v.
BOARD OF GOVERNORS OF the FEDERAL RESERVE SYSTEM, et al.

 

http://ftp.resource.org/courts.gov/c/F2/766/766.F2d.538.84-5067.html

Mon, 12/27/2010 - 15:41 | Link to Comment max2205
max2205's picture

GL

 

Borrow my .306

Mon, 12/27/2010 - 15:48 | Link to Comment MsCreant
MsCreant's picture

Aw hell, give it to him.

Mon, 12/27/2010 - 15:41 | Link to Comment Bearster
Bearster's picture

What, you mean when the government coercively intrudes into the market for the good of us all, they hurt some people?!?  Say it isn't so!

Mon, 12/27/2010 - 16:49 | Link to Comment Temporalist
Temporalist's picture

I must edit your comment for you:

"What, you mean when the government coercively intrudes into the market for the good of a few elites they hurt everyone?!?  Say it isn't so!"

Mon, 12/27/2010 - 15:41 | Link to Comment optimator
optimator's picture

Binny should just wire him the amount of his losses just as he did for the banksters.  It won't cost Binny a cent.

Mon, 12/27/2010 - 15:46 | Link to Comment Larry Darrell
Larry Darrell's picture

Benny has painted himself into so many corners his office must look like a fucking buckyball.  He can't just make this guy whole even on the down low because that $X millions of fiat dollars will probably just make a new "buyer of size" for physical metals.  Obviously his fiat accounts have been torched and he's done some reading.  What would you buy first thing if the Fed gave you $X millions?

Mon, 12/27/2010 - 16:51 | Link to Comment Temporalist
Temporalist's picture

Please don't give buckyballs a bad name by associating them with The Bernank.

Mon, 12/27/2010 - 15:45 | Link to Comment RichardP
RichardP's picture

This is a nice collection of links.  Thanks.

The Fed was created by, and is responsible to, Congress.  Since we can't sue Congress, my guess is that we can't sue one of Congress's sub-units.

Mon, 12/27/2010 - 15:44 | Link to Comment Salinger
Salinger's picture

OT

Average stagehand at Lincoln Center in NYC makes $290K a year

http://bit.ly/hT9nNS

Mon, 12/27/2010 - 15:57 | Link to Comment trav7777
trav7777's picture

depressing...you can bust ass, study hard subjects for 7 years or more and a fucking stagehand will outearn you.

290k for a SALARY?  I guess as long as the elites continue to buy tickets, make hay

Mon, 12/27/2010 - 16:51 | Link to Comment Temporalist
Temporalist's picture

Thanks for the link.

Mon, 12/27/2010 - 15:45 | Link to Comment johnnymustardseed
johnnymustardseed's picture

Everything is rigged. I got beat up on RYDEX shorts on financials when they banned shorting financials.  F them! They are the same people that will tell you all the virtues of capitalism.. I would rather be a commie at least you know the rigging and can work around it

Mon, 12/27/2010 - 15:50 | Link to Comment Bearster
Bearster's picture

Johnny: this isn't capitalism.  It's fascism.  Capitalism does not have:

 - a central bank

 - central planning

 - fiat currency

 - bailouts

 - stimulus / pork

 - too big to fail

 - regulation

 - massive taxes

 - a ponzi scheme for a retirement system

 - out-of-control litigation

If you blame capitalism for the failure of the current, then the enemies of freedom have won.

Mon, 12/27/2010 - 16:38 | Link to Comment njdoo7
njdoo7's picture

I still cannot belive people who actually think freedom is evil.  Maybe they should be put in a cage and see if they still think freedom is evil.

Mon, 12/27/2010 - 18:46 | Link to Comment MachoMan
MachoMan's picture

This is not very accurate...  we have been put in a cage, it's just that the cage has free meals, television, and we don't even have to get out of bed...  insofar as cages go, ours is a pretty nice one...  and you might even say we chose it.

Mon, 12/27/2010 - 16:55 | Link to Comment Missiondweller
Missiondweller's picture

All excellent points.

I don't know what this is but it sure as hell is NOT free markets.

When you cannot tell who the players are and how much money is being used to manipulate markets then the only reasonable investments are gold and silver.

Mon, 12/27/2010 - 15:44 | Link to Comment gbresnahan
gbresnahan's picture

If you aren't an insider, then it's safe to assume you're an outsider.

Mon, 12/27/2010 - 17:17 | Link to Comment Ghostbusters
Ghostbusters's picture

it's an inside joke and we're on the outside.  this guy got burned like everyone else and we all have a legit claim of manipulation in the markets, obvious acctg rule changes and the more perverse, but good luck.  it's an inside joke and everyone is laughing at you

Mon, 12/27/2010 - 15:45 | Link to Comment Mark Medinnus
Mark Medinnus's picture

What part of Bencopter's 2002 speech did W.P. miss?

Mon, 12/27/2010 - 15:47 | Link to Comment jbc77
jbc77's picture

The guy has a couple god points. I wish him the best of luck and I hope the guy fucking sues the fed and gets a bunch of ETF holders to sue with him. Fuck Ben Bernanke and fuck the Fed, bunch of ponzi scheme dick suckers.

Mon, 12/27/2010 - 15:49 | Link to Comment the grateful un...
the grateful unemployed's picture

everybody knows, the market is supposed to go one way, up. When the market goes down, buy it, when the  market goes up, buy it also. If you don't understand see rule one.

The economy isn't some science fair project, its a matter of policy, which originates out of nationalism, protecting America's spending power in global commerce. When the market goes down, it is a matter of national security. (ergo Mr Pitts should keep his mouth shut, or he will be on a desert island with Julian Assange) 

Taking that position to heart, note that when the revolution does begin it won't be investors with class action lawsuits, it will be hedge funds, and the very investment banks the Fed bailed out, and then failed to regulate. This is the new Feudal Economic warfare. And as the Socialist minions of Barack Obama line up on one side, the banner of the V Squid and his loosely bunched former Capitalists on the other, that it will be one hell of a conflagration. Best advice in that instance, is to stay out of the way, and hope you choose the correct side.

In the meantime dont' try to short this market with 3X leverage, that way lies madness.

Mon, 12/27/2010 - 16:03 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

"And as the Socialist minions of Barack Obama line up on one side, the banner of the V Squid and his loosely bunched former Capitalists on the other, that it will be one hell of a conflagration."

Obama has already shown himself to be a shill.  There are no socialist minions.  These are merely illusiary.  Pay attention to what they do, not what they say.  Latest point of fact:  the recent extension of the tax cuts, coupled with the extension of UI benefits (paid, of course, entirely by Fedgov).  Result:  the wealthy continue to pay reduced taxes, continue to get the "useless eaters" income via rents and consumption of various forms, and more monetized debt to throw at stawks.  Pretty fucking perfect result, hence the "strong bipartisan support".   

Mon, 12/27/2010 - 16:12 | Link to Comment Bearster
Bearster's picture

Reduced?  From what?

People who have made the mistake of earning a lot (as opposed to people who have a lot of wealth) pay 35% to the federal government.  Typically they pay another 8% to the state government, that's 43%.  Add to that 16% social security on the first ~$100,000, which would be around 3% if a hypothetical "rich bastard" had a $500,000 income and the tax rate is 46%.  Add to this property tax and sales tax, and it's obvious that the total tax rate is over 50% (and this omits all sorts of other hidden taxes, like utility user fees, and god forbid one takes a vacation and rents a car at the airport).

Reduced?  Only in the Twilight Zone.

Mon, 12/27/2010 - 17:02 | Link to Comment the grateful un...
the grateful unemployed's picture

okay forget Socialist minions, how about Defender of Welfare America? The Wealthy probably account for 90% of GDP and pay only a third of that in taxes. That's till too much, the average poor jerk is buying into the Tea Party, Libertarian result, which makes up the other 10%. They want it all and dumb fuck America wants to help them. Greed is dead, long live greed, but the secret is buying them off with a few food stamps, a free (second rate) healthcare system, and free rent.

Mon, 12/27/2010 - 15:49 | Link to Comment jimgcpa
jimgcpa's picture

Maybe he should sue God for giving him Shit for Brains.

 

 

Mon, 12/27/2010 - 15:54 | Link to Comment Mercury
Mercury's picture

He's going to want a really good lawyer when Obama breaks his heart too.

Poor dear.

Mon, 12/27/2010 - 15:55 | Link to Comment Mark Medinnus
Mark Medinnus's picture

Crude, but I chuckled.

Mon, 12/27/2010 - 16:14 | Link to Comment knukles
knukles's picture

3X inverse Shit for Brains

I mean somebody gets bailed out by the Fed which distorts markets and somebody else gets screwed, so let's compensate the guy that got screwed when we, the taxpayer were originally getting screwed bailing out the first screwee before the second screwee claims being screwed when in fact both are not the first screwed because we the taxpayer were screwed first by the screwers who screwed us by bailing out the screwees who got screwed before the latter screwee got his screwing so as it should be, nobody but the original screwee, the taxpayer ought be getting screwed by saving anybody else claiming to be a screwee.

Mon, 12/27/2010 - 16:31 | Link to Comment MsCreant
MsCreant's picture

I know you know that was screwy.

All of us are screwees now. All of us are screwy for letting it go on too. 

We are so fucked we can't tell where the Bernank's dick starts and where our ends end.

Bumper sticker suggestion: Get the Fed out of my wallet and out of my ass.

Mon, 12/27/2010 - 16:54 | Link to Comment Mesquite
Mesquite's picture

NOW I understand..!!!!!

( Snicker, gag, Uncontrollable laughter..!)

Mon, 12/27/2010 - 17:27 | Link to Comment cosmictrainwreck
cosmictrainwreck's picture

man, I cannot believe all the ZHers rolling over on this & laughing at somebody trying to actually put up a fight. I thought ya'll was Fight Club? WHAT A BUNCH O' PANSIES.

Mon, 12/27/2010 - 20:16 | Link to Comment Mark Medinnus
Mark Medinnus's picture

Fair point, but the war is waged on a few fronts.  Many - if not most - ZHers oppose the FED in part with home-delivered PM's.  I do. 

Bernanke telegraphed his QE's well in advance.  Kudos to W.P. for his chutzpah, but not his insight.  Hence, the needling.     

Tue, 12/28/2010 - 00:20 | Link to Comment Terminus C
Terminus C's picture

He is not putting up a fight against the Fed, he is attempting to gain access to the tax payer trough.

Mon, 12/27/2010 - 15:49 | Link to Comment haskelslocal
haskelslocal's picture

The rabbit hole goes deeper into why it was allowed to create such investment vehicles such as FAZ and SRS in the first place. Daily resets allowed daily decay of these derivitives, causing them to plunge in value, regardless of the underlying CDS carried within. Each also mirrored "best of breed" stocks within. Now tell me. If you're buing a product that was shorting an industry, why would you short the best companies within that industry? And I mean, ONLY the best companies within? What about the true laggards and near failures? Wouldn't a good product carry sure bet losses if the intent was to make money off failure?

SRS carries as it's top tier SPG, PCL, EQR, HCP, BXP, VNO, PSA, VTR, NLY... The best in malls (Simon) the best in storage Public Storage) the best in office buildings (Vernado) the best in healthcare (HCP)....

Sham game. Yet suing the FED is brilliant for I'm sure the lawsuits at ProShares door is a mile high and fully ignored.

Mon, 12/27/2010 - 16:23 | Link to Comment Id fight Gandhi
Id fight Gandhi's picture

Short fas and FAZ and pocket decay.

Mon, 12/27/2010 - 16:26 | Link to Comment BurningFuld
BurningFuld's picture

Went my daughter-in-laws grad last year @ UW. Proshares was the biggest advertiser there. I said to myself "Scamtastic!"

Mon, 12/27/2010 - 15:51 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Gold miners getting blowtorched/monkey hammered.

Mon, 12/27/2010 - 16:48 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Dollar gagtied, next the thugs will torture her.  DXY 80.5 all year with a little upside and a little downside.  The markets are pumping aig and humping netflix.  Bonds are selling off and no one is talking about it, except the MSM is still chanting the ZH slogan, race to the bottom.  Gold is monie, so is silver.  What is so hard about that?

Mon, 12/27/2010 - 16:56 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

Dollar over 86 in 6 months.

China rate hikes not good for gold & commodities this will play out over the next few years until they revalue 20%. Every rate hike (5 coming in 2011) a kick in the nutz'

Look at Vale the worlds largest exporter of ore. Blowtorched today on the news. This pullback on commodities will also help the slap the inflation cost-push crowd across the face ...

Mon, 12/27/2010 - 17:17 | Link to Comment downrodeo
downrodeo's picture

dbl

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